Third, go back to your 401(k) and contribute as much as you can. If you max that out at $17,000 in 2012…

Fourth, open up a taxable investing account (basically, a normal, non-Roth, non-401(k) investing account) and invest there. There is no limit to how much you can contribute here, but if you're earning enough to be able to invest over $20,000/year, odds are you'll expect a high standard of living later in life, so invest aggressively.

Fifth, at this point, if you still have money to invest, you've earned yourself a little fun. Consider alternative investments — investing in yourself, angel investing, sparingly picking individual stocks, or even large-scale bets on delusional people's ideas of when they'll get married (ahem Indian women), like I do. These alternative investments should represent a small percentage of your total investing outlay — I like around 10% if you've maxed everything else out.

Check the video for more, including my specific recommendations for Farrell.

By the way, it's easy to get intimidated by all of this. But the Ladder of Investing is a step-by-step guide to determine where your investing money should go. Once you set this up once and automate it, your money will flow where it needs to go for years. This is how people can earn millions of dollars over their lifetime by "setting it and forgetting it."

If you're curious about the automation portion of this…

Sign up for my free Insider's Kit to get information on how to automate your finances! Name: Email: 100% privacy. No games, no B.S., no spam.